Harvest Health & Recreation Archives - Green Market Report

It’s time for your Daily Hit of cannabis financial news for April 23, 2019.

On The Site

Harvest Health & Recreation

Harvest Health & Recreation, Inc. (CSE: HARV) (OTCQX: HRVSF) reported the company’s fourth quarter and fiscal year 2018 financial results. For the quarter HHR delivered total revenue of $16.9 million, an increase of 135% versus last year’s $7.2 million in the same time period. This was a sequential increase of 52%.

Cannabis Rock Star Lineup For The Green Market Summit In Chicago

As the U.S. market continues to develop, the Green Market Reportinvites you to discuss the advanced economic state of cannabis at the Green Market Summit in Chicago, Illinois on May 7, 2019. This special one-day symposium will discuss the continued development of the U.S. cannabis market, as well as the effect that the 2018 Farm Bill’s passage has had on the industry.

Mattio Communications

One of the fastest growing cannabis-focused public relations firm MATTIO Communications announced that it received a seed round of funding. The investors for the company included Phyto Partners, venture capital titan Alan Patricof, founder of Greycroft, and Green Seed Fund.

In Other News

IONIC Brands

IONIC Brands Corp., formerly known Zara Resources Inc. (CSE: IONC; FRA: 1B3), announced that has acquired Zoots Premium Cannabis Infused Edibles for $855,000 and an issuance of 10.7 million common shares of the company. Additionally, ICONIC will issue 5.35 million common share purchase warrants to the shareholders of Zoots, with an exercise price of C$1.33 per share, exercisable over three years.

DELTA 9

DELTA 9 CANNABIS INC. (TSXV: NINE) (OTCQX: VRNDF) today released its year-end financial results for ending December 31, 2018. Revenue for the company rose by 702% from $944,114 in the previous year to $7.2 million. Gross profits were $5.74 million, up from $442,681 in the previous year. The company reported a net income loss of $8.61 million. For the fourth quarter, revenue was $5.27 million and a gross profit of $3.34 million. Quarterly losses were $2.17 million.

MedMen Enterprises

MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF) announced that it has entered into a definitive agreement for the previously announced $250 million secured convertible credit facility with Gotham Green Partners. MedMen received the first tranche of $20 million. The company said it will use the proceeds to consolidate its supply chain, invest in technology and digital infrastructure, accelerate expansion through acquisitions and investments in core markets, integrate acquired assets, and operationalize existing retail licenses.

The company still delivered a net loss of $71.1 million for the quarter which included a non-recurring, non-cash fair value charge of $50.7 million associated with convertible debt that was converted to equity during the year. The gross profit, excluding the impact of biological assets, was $7.2 million, an increase of 342%, up from $1.6 million in Q4 2017.

“2018 continued to set records for Harvest’s growth and momentum across the United States,” said Chief Executive Officer Steve White. “Three key initiatives dictated our decisions throughout the year and will continue to be our focus in 2019: aggressively expanding our retail and wholesale footprint across the U.S., building, acquiring and expanding our suite of brands across our footprint and continuing to operate in a financially disciplined way, while also fueling the revenue growth of the company.”

HHR made a splash recently when it announced it was acquiring Verano Holdings in a deal valued at $850 million. Verano is one of the largest privately held multi-state, vertically integrated licensed operators of cannabis facilities. Upon completion of the acquisition, it is expected to add licenses throughout the Midwest and East Coast. As of December 31, 2018, HHR operated ten retail locations in four states. The company said that significant expansion of cultivation, manufacturing and retail locations will occur throughout 2019.

Fiscal Year

For the full year for 2018, HHR reported total revenue of $47.0 million, an increase of 106%, compared to $22.8 million for 2017. The net loss was $67.5 million which included a non-recurring, non-cash fair value charge of $50.7 million associated with convertible debt that was converted to equity during the year.

The gross profit, excluding the impact of biological assets, was $24.6 million, an increase of 135% compared to $10.5 million for 2017. The gross profit margin, excluding the impact of biological assets, was 52% for 2018, compared to 46% in the same period the prior year. The adjusted EBITDA totaled $10.3 million for the 12 months ended December 31, 2018, compared to $6.0 million for the same period in 2017.

Cash On Hand

As of December 31, 2018, HHR had $191.9 million of cash and cash equivalents and $30.9 million of debt outstanding. The company has raised nearly $300 million in 2018: approximately $50 million of convertible equity notes, which converted into common stock when Harvest completed the RTO, approximately $20 million of senior debt, and over $218 million of equity issuances.

Looking Ahead

In February 2019 the company announced the pending acquisition of Falcon International Corp, a California vertically-integrated operator currently serving more than 80% of the legal dispensaries in California. It is expected to serve as a beachhead in California, providing cultivation, manufacturing, and distribution, wholesale opportunities, is expected to add well-regarded brands like Cru and High Garden to its portfolio and is expected to add key personnel to our team.

It’s time for your Daily Hit of cannabis financial news for April 9, 2019.

On The Site

Harvest Health & Recreation

Harvest Health & Recreation, Inc. (CSE: HARV, OTCQX: HRVSF) is acquiring CannaPharmacy, Inc. in a deal with undisclosed value. CannaPharmacy owns or operates cannabis licenses in Pennsylvania, Delaware, New Jersey, and Maryland. Harvest recently announced the private placement of $500 million in convertible debentures to continue to finance acquisitions and corporate growth. Harvest said that it expects that the transaction will be accretive to Harvest’s 2020 revenue and EBITDA.

In Other News

Pivot Pharmaceuticals Inc.

Pivot Pharmaceuticals Inc. (CSE: PVOT) announced that on April 8, 2019, it entered into a binding letter of intent with High Park Ventures Inc. (HPK) for a private placement of $15 million. The private placement is expected to close in two tranches and is contingent upon HPK satisfactorily completing its due diligence investigation. “With the investment and support provided by the High Park Ventures Team, we are able to implement and accelerate our initiatives,” stated Pivot CEO Dr. Patrick Frankham. “The experience and track record of the High Park Ventures Team will greatly benefit Pivot’s management team as we commercialize our industry leading bio-cannabis product line.”

Green Thumb Industries

Green Thumb Industries (CSE: GTII) today reported its financial results for the forth quarter and full year ending on December 31, 2018. For the fourth quarter, GTI increased its revenue by 237% to $20.8 million. For the year, GTI made $62.5 million. EBITDA for the quarter was a loss of $4.8 million and for adjusted EBITDA was a loss of $12.4 million. However, for the year, EBITDA and Adjusted EBITDA was $27.7 million and $21.5 million, respectively. The company experienced a net loss of $3.1 million for the quarter and $7.7 million for the whole year. “Discipline continues to drive how we allocate capital to create long-term shareholder value,” commented GTI Founder and CEO Ben Kovler. “We continue to execute against our strategic priorities for 2019: 1) establish a leading brand portfolio through innovation, standardization, and distribution; 2) accelerate retail growth through new store openings and consumer loyalty, and 3) bolster infrastructure with people, process, and technology to deliver sustainable profitable growth.”

Cansortium Inc.

Cansortium Inc. (CSE: TIUM) today announced a $25 million private placement with Canaccord Genuity Corp. and Paradigm Capital Inc. The company will issue convertible debenture units at an issue price of $1,000 per unit. Each unit will consist of a senior secured convertible debenture of the company valued at $1,000 and accruing interest at 12.0% annually, and 229 common share purchase warrants. The offering is expected to close on or around April 23, 2019.

It’s time for your Daily Hit of cannabis financial news for April 4, 2019.

On the Site

Merida Capital

Cannabis private equity fund Merida Capital Partners has launched its third fund for $200 million, which will focus on concentrated, high conviction investments in leading companies in the cannabis ecosystem. The company said that since launching its first fund in late 2016, it has deployed nearly $80 million across its first two funds and now has more than $125MM under management.

The letters were sent to the U.S. Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration, the Federal Reserve System and the Office of the Comptroller of the Currency. The letters read as follows.

Marijuana Stocks Look Frothy, But Aurora Stock Is Well-Prepared

Over the long run, I remain net bullish on legal marijuana. However, my optimism for the sector doesn’t cloud reality. I can see as plain as daylight that the honeymoon phase is over. Now, companies like Aurora Cannabis (NYSE: ACB) must provide the goods. If not, ACB stock could face serious trouble.

In Other News

Harvest Health & Recreation

Harvest Health & Recreation, Inc. (CSE: HARV) announced that it has entered into a brokered private sale of up to 500,000 convertible debentures of the company, at a price of $1,000 per debenture. The sale is expected to raise $500 million and will be closed in five tranches over a period of no more than 18 months. The first tranche is expected to close on May 1, 2019. Proceeds from the sale will go towards general corporate purposes and working capital.

Halo Labs

The cannabis extraction company Halo Labs Inc. (OTC: AGEEF) announced that it has raised $18,143,000 in a convertible note offering. The proceeds of the offering will go towards leasehold improvements, the purchase of extraction equipment, working capital and general corporate purposes.

Aurora Cannabis

Aurora Cannabis Inc. (NYSE: ACB) announced that it has appointed Carey Squires as its Executive Vice President of Corporate Development and Strategy. Squires recently served as Managing Director and Co-Head of Equity-Linked Capital Markets for BMO Capital Markets. In his new role, Squires will focus on developing strategic partnerships, growth initiatives, and investor development.

Harvest Health & Recreation, Inc. (CSE: HARV) has formed a joint venture with Aina We Would (AWW), LLC for a real estate investment vehicle that plans to provide funding to purchase cannabis-related real estate assets. In addition to a Harvest subsidiary, AWW is made up of two family offices, Aina Advisors LLC and Stadlen Family Holdings, LLC.

Aina and Stadlen have both committed to fund or arrange up to $100 million to fund projects for the joint venture. The statement said that AWW plans to buy, develop and finance new construction projects, engage in land purchases, capital improvements and sale-leasebacks to Harvest and other operators in the cannabis industry.

As a part of the arrangement, Harvest will have the opportunity to get lease rates below current market providers and then source permanent financing for the properties it acquires. Harvest may also use AWW for its construction and real estate development needs.

In addition, Harvest said that it was has committed to lending AWW a minimum of up to $30 million in short-term financing to permit AWW to seek out acquisition projects. The company said that the goal of the short-term financing was so that they could move quickly on projects. These funds will be replaced by permanent financing provided or sourced by Stadlen and Aina.

“AWW gives Harvest an excellent funding option for the development of cultivations, manufacturing facilities, and dispensaries,” said Harvest President Steve Gutterman. “This new vehicle, combined with the approximate $290 million we raised in conjunction with our recent debt and equity financing transactions, affiliate roll-up and recently completed acquisitions leading up to and following our listing on the CSE, gives us one of the strongest balance sheets in the industry.”

Harvest owns more than 40 cannabis licenses with a domestic footprint that includes real estate, equipment and other assets in 11 states, including Arizona, Arkansas, California, Colorado, Florida, Maryland, Massachusetts, Nevada, North Dakota, Ohio and Pennsylvania.

“Real estate is the lifeblood of the cannabis economy and a huge piece of any company’s bottom line,” said Harvest Executive Chairman, Jason Vedadi. “With this partnership, AWW has been structured to turn a significant cost center into a potential profit driver and to become a potentially attractive source of financing for Harvest’s expected expansion.”

It’s time for your Daily Hit of cannabis financial news for December 3, 2018

On the Site

Cresco Labs

Chicago-based Cresco Labs is set to begin trading on the Canadian Securities Exchange on Monday using the symbol CL. Cresco is headed by Chief Executive Officer Charles Bachtell who was also a founding member of the Illinois Cannabis Bar Association and the Medical Cannabis Alliance of Illinois. Cresco hits the market with operations in six states (Illinois, Ohio, Pennsylvania, Nevada, California, and Arizona). The company focuses on entering markets with outsized demand potential, significant supply constraints and high barriers to entry.

Meet The Owner Of A Humboldt County Organic Farm

Green Market Report recently visited Humboldt County and during our time out there, we met Dave Sandomeno. He’s the owner/farmer of Sunrise Mountain Farm. Along with his wife Lorelle, they run an organic cannabis farm that supplies product to leading companies like Papa & Barkley. Check out the 8-foot tall cannabis plants!

In Other News

Cronos Group

The cannabis industry was abuzz with news this morning as news broke that the maker of Marlboro Cigarettes, Altria Group, (NYSE: MO) was in talks to acquire the Canadian Licensed Producer Cronos Group (NASDAQ: CRON). News of the talks caused Cronos’ stock price to jump roughly 10% from $9.25 at the start of trading to $10.17 at the close of the market. At present, details of the deal at not forthcoming and there is no certainty that Cronos will even agree to a deal. The talks are expected to last for several weeks.

Aphria

Aphria Inc. (NYSE: APHA) took a major hit today as stock prices for the company plummeted in the wake of a report where shorth seller Gabriel Grego called the company worthless. Grego, who is the founder of Quintessential Capital Management, worked with Hindenburg Research, a forensic analysis firm. In the report, Grego wrote that the company had redirect company funds towards investments held by company insiders. Both Grego and Hindenburg Research are shorting Aphria. In response, Aphria issued a statement calling the report “malicious and self-serving,” and told investors to “exercise caution in relying on the misrepresentations and distortions contained in the report and recognize that, by their own admission, Hindenburg Research “…stands to realize significant gains in the event that the price of any stock covered herein declines.””

OG DNA Genetics

The cannabis brand OG DNA Genetics announced today that it has successfully closed its first two equity financings, raising $35 million from a group of institutional and strategic investors. Serving as the placement agent for the financings was KES 7 Capital Inc. The company intends to use the proceeds to manufacture, distribute, and sell a variety of cannabis products under the DNA brand label. “I’m excited with our ability to now bridge the gap between real financial markets and real cannabis companies,” said Don Morris, co-founder of DNA. “We have a strong network of great operators and brands across many verticals and applications in the cannabis space, which combined with this capital raise enables us to further develop and refine them, while always staying true to our core strengths, which have positioned us extremely well for our next phase of growth.”

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis